| Title | Automotive Manufacturer Risk Analysis: Meeting the Automotive Fuel Economy Standards |
|---|---|
| Record ID | 49045 |
| Personal Name Creator |
Bradley, Stephen P.; Karnani, Aneel G. |
| Source | 184p. in various pagings |
| Corporate Creator | HH Aerospace Design Company |
| Corporate Contributor |
John A. Volpe National Transportation Systems Center (U.S.); United States. Department of Transportation. National Highway Traffic Safety Administration |
| Publisher | United States. Department of Transportation. National Highway Traffic Safety Administration |
| Publication Date | 19790801 |
| Language | English |
| Abstract | An overview of the methodology and some findings are presented of a study which assessed the impact of the automotive fuel economy standards (AFES) on the four major U.S. automakers. A risk model was used to estimate the financial performance of the manufacturers, given assumptions about their strategy for meeting the AFES and the resolution of exogenous (i.e. economic and marketing) and endogenous (i.e. technological and manufacturing) uncertainties. Within a nominal scenario (i.e. all but fuel economy-related data set at nominal values), four cases were examined: nominal (in this case, fuel economy data set at nominal), optimistic (fuel economy gains higher, costs lower than estimated by Department of Transportation (DOT)), pessimistic (vice versa), and probabilistic (fuel economy variables distributed according to a truncated normal distribution). The risk due to technological and manufacturing uncertainties was assessed. The capital expenditure estimates from a recent DOT report were compared with nominal model output. Three additional scenarios were examined, assuming nominal values for fuel economy-related variables: ideal (downsizing and material substitution on a more voluntary basis, without strict AFES); foreign penetration of mid-size car market, and economic risk (three different demand changes in U.S. market). It was found that the risk due to uncertainty in manufacturability is higher than that due to technological uncertainty, and that the decrease in variable manufacturing cost due to downsizing is more than enough to offset the corresponding increased capital costs. |
| Rosap ID | dot:10527 |
| Rosap URL | https://rosap.ntl.bts.gov/view/dot/10527 |
| TRT Terms | Automobile industry; Motor vehicle industry; Automobiles; Risk analysis; Fuel consumption; Standards |
| General Subjects | Fuel economy standards |
| Classification | NTL - ECONOMICS AND FINANCE - ECONOMICS AND FINANCE; NTL - ENERGY AND ENVIRONMENT - ENERGY AND ENVIRONMENT |
| Geographical Coverage |
United States |
| Contract Number | DOT-TSC-657 |
| Report Number | DOT-TSC-NHTSA-79-24; DOT-HS-803 763 |
| Resource type | Tech Report |
| URL | https://ntlrepository.blob.core.windows.net/lib/49000/49000/49045/DOT-TSC-NHTSA-79-24.pdf |
| Format | |
| Database | NTL Digital Repository |